Vehicle owners are generally required by law to carry proof of insurance, in addition to a valid drivers license and vehicle registration, to legally operate their motor vehicles. The proof of insurance may be in the form of a paper insurance card issued by an insurance provider that is underwriting the insurance coverage. The insurance card may identify the name and address of the vehicle owner, the name of the insurance provider, the policy number, the effective date and the expiration date of the insurance coverage, the vehicle make, the vehicle model, the vehicle identification number (VIN), and the like.
A new insurance card is typically issued by an insurance provider each time a vehicle owner obtains a new insurance policy and/or renews his or her existing policy. However, it is not uncommon for an owner to forget to place the insurance card in the vehicle or to replace the expired insurance card with the new insurance card. As a result, if the owner is subsequently stopped by a law enforcement officer, the owner may not be able to produce valid proof of insurance. Furthermore, the officer may not have any other means of verifying insurance coverage. Consequently, the owner may incur civil penalties (e.g., pay a traffic fine) even though the owner may have current vehicle insurance coverage.
In addition, a vehicle owner may renew his or her insurance policy by paying only a portion of the insurance premiums, but may stop making payments upon receiving a new insurance card, thereby causing the policy to lapse before its official expiration date. The owner may, nonetheless, present the insurance card as proof of “current” insurance coverage to, for example, a department of motor vehicles official to obtain or renew a vehicle's registration. The official typically verifies the owner's insurance coverage simply by inspecting the expiration date listed on the insurance card. Thus, the official may not be able to determine at that point in time that the owner's insurance policy is in fact invalid, and the owner may renew the vehicle's registration and continue to operate his or her motor vehicle without any vehicle insurance coverage. This type of fraud may increase insurance costs for insured drivers, insurance providers, and federal, state and local governments. Moreover, it may increase the burden on taxpayers if a person injured by an uninsured driver does not have any insurance.